KRA Opens Voluntary Disclosure Tax Program for Taxpayers

There are two types of charges in form of taxes that Kenyans pay; direct and indirect taxes.

The Kenya Revenue Authority has reopened its Voluntary Tax Disclosure Program (VTDP)  to help taxpayers  to get current with their taxes.

Under the program, taxpayers with tax penalties that have accrued over the past five years will now be eligible for full or partial relief.

KRA says that the penalties will include interests on the undisclosed taxes, and will be implemented under the VTDP that was introduced through the Finance Act, 2020.

The VTDP became effective 1st January 2021 and shall be in effect for a period of 3 years up to 31st December 2023. KRA aims to use the program to improve on its  revenue collection through enhanced compliance by bringing more taxpayers from the underground economy into the tax net.

This is a programme where a taxpayer confidentially discloses tax liabilities that were previously undisclosed to the Commissioner for the purpose of being granted relief of penalties and interest of the tax disclosed.

“VTDP applies to all tax liabilities accrued/derived in the specified period including individual Income Tax, Corporate Tax, PAYE, Withholding Income Tax, Capital Gains Tax, Value Added Tax, Withholding VAT, Excise Duty, Monthly Rental Income Tax and Turnover Tax,” said KRA.

Persons who make full payment of disclosed taxes in 2021 will get 100 per cent relief in penalties and interest while those who pay in 2022 and 2023 shall get relief at a rate of 50 per cent and 25 per cent respectively.

However, the program is not applicable to a taxpayer who are under audit or investigation for the undisclosed tax, or has been served with a notice of intention to investigate or carry out an audit/compliance check for the undisclosed tax, or is a party to an ongoing litigation in respect to the tax liability or any matter relating to the tax liability.

Those who take advantage of the programme will not be prosecuted for disclosed tax liabilities.

Those who disclose and pay the taxes will also be issued with a VTDP certificate to prove they took advantage of the programme.